The Asian tigers also referred to as the Asian Dragons refers to four countries namely, Singapore, Hong Kong, South Korea and Taiwan that developed economically through rapid industrialization in the early 1960s up to the early 1990s.
This essay will focus on the economic growth of the Asian Tigers between the years 1960s to 1990s and their stunted economy in the late 1990s up-to-date. It will also focus on the policies made by the Asian Tigers respective governments which catalyzed the economic growth and also the modern day policies which are currently made to improve the economies of these countries.
To understand the economic growth of the Asian tigers, this essay will raise and answer some accounting theories which include the three theories which contribute to the production of goods and services. These theories include, Labor factor, Capital factor and technological know-how. Other issues to be analyzed include the political system between the years 1960s up to 19190s, the government policies which aggravated the economic growth, environmental factors and also the government incentives channeled to various economic sectors.
The four Asian tiger’s nations took a common development plan in the early 1960s, one of the key figures of development was that, the economy was supposed to be export oriented rather than import oriented. This enabled the local industries to flourish at the expense of foreign imports.
To implement this policy, Asian tiger’s governments imposed heavy taxes on imports thus discouraging the importers from importing goods into the country. It was also easy to make and implement policies as there were no established democratic political systems and therefore there was no opposition to any policies formulated by the government.
The Asian Tigers governments encouraged its people to pursue education in order to boost the labor force of the developing industries. Land and labor being the major factors of production, Asian tigers required all the students to have at least basic secondary education so as to be self-reliant when it came to workforce.
People were given tenure of land ownership which enabled people to acquire portion of land and invest on it. To control the labor force, trade unions were discouraged and employees reaffirmed the security of their jobs. According to Marthinsen (621), the Asian tiger’s policies resulted to accumulation of capital hence the rapid industrialization of the Asian tiger’s countries.
The economic development of Asian Tigers countries began to post stunted growth in the early 1990s. This was mainly occasioned by the economic model which was adapted by the Asian tiger countries. The model was based on exports which targeted well-developed countries at the expense of home market satisfaction.
Too much reliability on exports to certain countries made the Asian tigers lose competitive advantage over the neighboring markets which included India and China. As a result of these, the Asian tigers economies began to nosedive as the economy mainly relied on the exports. Due to the fast growth of economy, the property market and stock share prices were overvalued, resulting in their sudden crash and this caused a worldwide financial crisis.
To overcome the Doldrums in the economy among the Asian tiger’s countries, some policies need to be implemented and strictly adhered to. These include government satisfaction of the local market needs rather than yearning for exports based mainly on the neighboring markets.
Satisfaction of the local market will enable the countries’ economy not to lean too much on the foreign market, but instead provide a ready market locally. The empowerment of the young generation is another policy that should be adopted by the Asian tiger countries to improve their economies.
This should be done through proper education, training and offering young people incentives to start their own industries as this will reduce the dependency level among the younger generation. The governments should also create a conducive environment for foreign investors who will invest locally, create industries, market their products and services locally as well as internationally thus generating revenue for the country.
One of the member countries of Asian tigers was Singapore whose economy also recessed in the mid-1990s as compared to that of its counterpart countries. Singapore is a country that is located in the east of Asia with a population of approximately 5 million people as compared to China which has a population of about 1.3 billion people.
This country has the third highest GDP per capital of about US$59,936 which rates it among the wealthiest country in the world. Singapore, despite having a high GDP per capital turnover, its citizens do not enjoy quality of life equivalent to its prosperous economy (Abeysinghe and Choy 81).
This is attributed by government policies and poor purchasing power of a common citizen of Singapore. This can also be compared to China which, despite being ranked as the second biggest economies in the world, a section of its citizens have continued to leave in poverty. The economy of Singapore is mainly based on service and industrial sectors which boast of having among the busiest ports in the world and the second biggest casino gambling market.
The economy of Singapore since the recession of the Asian tigers in the early 1990s has now continued to rise steadily making the country to be ranked among the wealthiest countries in the world alongside China. Just like China, the government of Singapore has continued to support local industrialization with the availability of local skilled labor. Singapore is classified as one of the most favorable countries to do business in the world.
During the recession of the Asian tiger’s economies, Singapore came up with an economy that was open to all investors both local and foreign a condition which made the country to be open to all the investors thus becoming integrated into the world economy. This can also be compared to China which pumped up its imports and increased its exports in the early 1970s, a policy which made China improve economically.
The main exports of Singapore are electronics and chemical goods where else its main imports are raw goods and natural resources. The country imports natural resources that it does not produce and redefine or reprocess them and then it exports again thus earning foreign exchange. On the other hand, the major industries in China include petrochemical industry, the motor industry, consumer goods, the steel industry as well as the energy industry.
In conclusion, among the Asian tigers, Singapore has continued to record a tremendous growth in its economy as compared to China. Both countries have also relied on their exports and imports to support their economies even though some regions in the two countries remain under developed especially the rural population.
Abeysinghe, Tilak , and Choy, Keen-Meng. The Singapore economy: an econometric perspectiveVolume 70 of Routledge studies in the growth economies of Asia. New York: Taylor & Francis, 2007. Print
Marthinsen E, John. Managing in a global economy: demystifying international macroeconomics.New York: Cengage Learning, 2008. Print